Better Returns in a Better World Project

Oxfam working with the investment community

“The question for institutional investors is not one of whether we should take account of poverty and development issues in our investment activities, but rather one of how we can conduct our activities in a manner that maximises the contribution we can make to overcoming the economic and other barriers to development.” Rory Sullivan, Insight Investment, lead from the investment community for Better Returns in a Better World Project

The Better Returns in a Better World Project aims to raise investor awareness of the importance of poverty alleviation as a corporate responsibility issue. It seeks to identify the key barriers to institutional investor action on poverty alleviation and development, and to develop proposals to help overcome these barriers.

The project considers the potential contribution of investors in three areas:

1. as allocators of capital;
2. as influences on the policies and practices of those companies in which they invest (with a particular focus on transnational companies which operate in developing countries and on developing countries;
3. and their wider influcence on public policy.

Find out more about the Better Returns in a Better World Workshops

Find out more about the challenge of poverty alleviation and the role of investors

About the project

"The Better Returns Project places institutional investors in the drivers seat to encourage best practices from others. It raises awareness among stakeholders and reinforces the idea that through their investments, investors have a major role to play in helping to find solutions.” Matt Christensen, CEO, The European Sustainable Investment Forum (Eurosif)

Fund managers and analysts from leading responsible and mainstream investment firms joined Oxfam's Chief executive, Barbara Stocking, at the City launch of Responsible Investment as a Force for Development on 4 November 2008.

Read the paper that launched the initiative.

In order to explore the questions around the role of investors in poverty alleviation, Oxfam is organising a series of nine workshops over the period January 2009 – March 2010. The workshops seek to address the following questions:

• Why should poverty-related issues be integrated in asset allocation and investment decision-making? Does their omission put financial value at risk, or does their inclusion help create financial value?
• Can poverty-related issues be incorporated into investment analysis? Can company performance on poverty-related issues be measured? How can these data be incorporated into investment analysis and decision-making?
• What are the appropriate time frameworks for considering poverty-related issues in investment practices? Are current investment time horizons appropriate?
• What should be the objectives of investor engagement on poverty-alleviation and development? Is engagement best conducted on specific issues within the development agenda or is it possible to have an integrated approach? Are there specific issues that are presently overlooked by investors?
• What reporting is required? What information should companies report to enable their contribution to poverty alleviation to be assessed? What information should investors provide to enable their contribution to poverty alleviation to be assessed?

In addition Oxfam expects that the workshops will also canvass some wider issues such as:

• What are the barriers to longer-term investment in developing countries? (e.g. motivations, assumptions, incentives)
• How does the role of investors differ between asset classes? (e.g. between equities and bonds)
• Should investors have different expectations of companies from developed and developing countries?
• To what extent do investment time horizons influence investors’ views on poverty alleviation?
• What regulatory changes or other incentives might be used to produce better outcomes for pro-poor development?

Find out more about the series of workshops.

A final briefing paper will conclude the project. This paper will compile the findings of the project, identify areas where investors could play a greater role in poverty alleviation, and present proposals for future work in this area. The paper will be presented to investors at an event in London and New York in April 2010.

The challenge of poverty alleviation and the role of investors

“If we want to deliver the Millennium Development Goals by the 2015 deadline, then institutional investors are sure to play an important role. The Better Returns Project takes up this challenge by exploring how global investors interact with the poverty agenda, both in terms of risks and opportunities.” James Gifford, Executive Director, The UN Principles of Responsible Investment Initiative.

The Millennium Development Goals (MDGs), agreed in 2000, provide the principal framework for global efforts to tackle poverty. Over the past eight years, we have seen significant progress towards the realisation of the MDGs: the number of people living on less than $1 a day fell by 278 million between 1990 and 2004, two million lives are saved every year by immunisation, and two million people now receive AIDS treatment. Yet, 1.4 billion people still live in extreme poverty, 10 million children a year die before their fifth birthday and 1.1 billion people do not have access to safe drinking water.

A key barrier to the realisation of the MDGs is access to capital. Under the right conditions, private investment can provide substantial development benefits through supporting economic growth, helping build essential infrastructure, and paying the taxes needed to provide schools, hospitals and other essential infrastructure and services.

However, investments in developing countries have not been unambiguously positive. Capital flows have concentrated in a handful of large, middle-income countries such as China, India, and Thailand (with low-income countries receiving relatively little investment), many of the investment flows have been highly volatile, and, foreign direct investment has, on many occasions, been controversial because of concerns about human rights or environmental impacts.

Find out more about Oxfam’s work on Business and the Millennium Development Goals.

Contact

To speak to someone about the Better Returns in a Better World Poroject, contact Helena Viñes Fiestas, Oxfam's policy adviser leading on the project hvinesfiestas@oxfam.org.uk, tel. +44 (0)1865 47 2118.

Find out more

Better Returns in a Better World Workshops

Oxfam's Briefings for Business